Demand for bio-blended bunkers, particularly B24-VLSFO, experiences a notable decline in key maritime hubs like Singapore and China, influenced by various factors including technological advancements, logistical challenges, and changing market dynamics. While Singapore witnesses sluggish demand due to increased adoption of efficiency technologies, logistical constraints and VAT issues affect availability in Chinese ports. However, logistical challenges in the Red Sea affect shipments of palm oil mill effluent (POME) from Indonesia, potentially impacting biofuel blending in Rotterdam.
Singapore and China observe a downturn in demand for bio-blended bunkers, with sales of B24-VLSFO significantly decreasing in recent months. Shipowners’ preference for efficiency technologies over bio-blends, coupled with logistical constraints and VAT issues, contribute to the slowdown in demand.
Technological Adoption and Market Dynamics
Increasing adoption of efficiency technologies, such as air lubrication and bubble systems, emerges as a favored alternative to bio-blended bunkers among shipowners. This shift reflects a preference for one-off investments in vessel efficiency improvements, influencing the decline in bio-bunker demand.
Logistical Challenges and Supply Chain Disruptions
Logistical challenges, including VAT issues and availability constraints, hinder the supply of bio-blended bunkers in Chinese ports like Zhoushan. VAT regulations discourage blending with VAT-exempt VLSFO, impacting availability and pricing of bio-blended bunkers.
Impact of External Factors on Biofuel Blending
Logistical challenges in the Red Sea disrupt shipments of palm oil mill effluent (POME) from Indonesia, potentially affecting biofuel blending in Rotterdam. Increased freight rates and supply chain disruptions could lead to price fluctuations in biofuel blends, influencing market dynamics in key bunkering hubs.
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Source: Engine
